Home builder confidence ticks up

The National Association of Home Builders reported Monday that its home builder confidence index is up for the third straight month, to its highest level since January.

The steadily improving job market, still-low interest rates and prices that in much of the country remain below past highs are helping to drive greater demand for new homes, the association said.

"Builder confidence appears to be firming following an uneven spring," said NAHB chief economist David Crowe.

The trade group surveys its members monthly to generate a score of 1 to 100 measuring confidence. Conditions above 50 are generally considered positive. In August, the index measured 55. Builders are most confident about prospects for sales in the next six months — which measured 65 — and current sales — 58. The measure of current buyer traffic lags, at 42, but climbed three points this month.

Despite the sunnier outlook, builders still face a number of challenges, said NAHB chairman Kevin Kelly, a builder and developer from Wilmington, Del., including tight credit conditions for borrowers and a shortage of finished lots and labor.

Builders were most confident in the West, and least confident in the Northeast.